Gen. 287] 287

 This opinion was originally issued in unpublished form on August

1

10, 1992 as Opinion No. 92-023. Subsequently, the Board approved the

contracts. Although our conclusion is unchanged and the Board has long

since acted, some passages in the initial opinion were susceptible of

misinterpretation. To avert unintended problems, we are withdrawing

Opinion No. 92-023 in favor of this published treatment of the issue.

PROCUREMENT

BOARD OF PUBLIC WORKS ) APPROVAL OF CONTRACTS DATED

“AS OF” AN EARLIER DATE

May 24, 1993

The Honorable William Donald Schaefer

Governor

The Honorable Louis L. Goldstein

Comptroller 

The Honorable Lucille Maurer

Treasurer

Board of Public Works

You have requested our opinion as to the legality of two

contracts presented for approval to the Board of Public Works

(“Board”) at the Board’s July 22, 1992 meeting. For the reasons

stated below, we conclude that the Board could lawfully approve the

contracts as presented if it chooses to do so. 

1

I

Background

The contracts in question are between the Department of

Health and Mental Hygiene (“DHMH”) and The Johns Hopkins

University School of Medicine (“Hopkins”). The contracts, which

are funded entirely with federal and private foundation grant monies,
288 [78 Op. Att’y

are for the purpose of obtaining studies of the effectiveness of

certain programs in improving the birth outcomes of Medicaid

recipients.

Hopkins has already begun performance under both of these

contracts, and the contracts are dated “as of September 30, 1991”

and “as of March 1, 1992,” respectively. We are told that DHMH

has not executed the contracts by signing them. On the other hand,

DHMH did not promptly seek to obtain approvals for the contracts,

and the delay in seeking approval coupled with the start of

performance by the contractor gave rise to concern that the parties

might have been proceeding as if the contracts were already in

effect. The record is not entirely clear on this point, however.

The contract dated as of September is for $530,066. Authority

for the approval of this contract has not been delegated by the Board.

See COMAR 21.02.01.04A(a) (delegating approval authority for

service contracts “in the amount of $100,000 or less” to the

Department of Budget and Fiscal Planning (“DBFP”)). Therefore,

DHMH “may not enter into” this contract without Board approval.

COMAR 21.03.01.

The contract dated as of March is for $56,900. This contract

ordinarily would have been subject to DBFP’s delegated approval

authority; DBFP, however, submitted it to the Board on the view that

the contract was either void or, if the Board so determined, voidable,

because it violated COMAR 21.02.03.02C(5). This regulation

provides in pertinent part as follows: “Any contract required to be

submitted to [DBFP] in accordance with this regulation may not take

effect unless it has been approved by [DBFP].” Again, the record is

not entirely clear but it appears that pre-approval performance by

Hopkins may have been the sole basis on which DBFP judged that

a regulatory violation had occurred. 

II

Analysis

We are aware of no provision in the Procurement Law that

prohibits approval and subsequent agency execution of a contract

dated “as of” an earlier date or where the contractor already has
Gen. 287] 289

 Prior to approval, the contractor is at risk that it will not be 2

compensated for work performed. The contractor may not enforce an

unapproved contract.

begun to perform. Under common law principles, moreover, there 2

is no bar to a contract’s taking effect prior to the date of execution.

Canaras v. Lift Truck Services, Inc., 272 Md. 337, 349, 322 A.2d

866, 872 (1974); Brewer v. National Surety Corporation, 169 F.2d

926, 928 (10th Cir. 1948). As the Court of Appeals wrote, “The

parties [to a contract] may ... provide at the time of its execution that

the contract is entered ‘as of’ an earlier date than that on which it

was in fact executed; such agreements are then effective

retroactively as of the earlier date and the parties are bound

accordingly.” 272 Md. at 349. As noted in Part I above, the

contracts at issue are dated “as of” the dates when the work began.

This phrasing is sufficient to obligate the State during the retroactive

periods, but only if the contracts are approved.

Thus, a regulatory violation does not occur solely because a

contemplated effective date for a contract is earlier than the expected

date of approval or execution by the State or because a contractor

already has embarked on performance. In the absence of other facts,

a proposed contract with an “as of” effective date or involving

performance underway may be acted upon under the procedures

normally applicable to contract approval. COMAR 21.02.

However, to the extent that Hopkins and DHMH had been

proceeding as if the contracts already were effective without

approval, DHMH’s handling of these contracts was inconsistent with

the intent of the procurement regulations. We recognize, in the

words of the regulation, that legally DHMH has not “enter[ed] into”

the contracts and that the contracts have not “take[n] effect,” given

that DHMH has not executed them. See generally Riegel v. Holmes,

171 N.E.2d 553, 563 (Ohio Ct. Com. Pleas 1960) (“enter into”

means to become legally bound). Nonetheless, the regulatory

scheme is intended to give DBFP and the Board the opportunity to

consider a services contract before the contracting agency treats the

contract as if it already is in force. Acquiescence in the contractor’s

undertaking performance while at the same time failing to seek the

requisite approval in a timely way may indicate to the approval

authority that the agency was not complying with the requirement for

approval. 
290 [78 Op. Att’y

 COMAR 21.03.01.04 requires the appropriate department head to 3

make an initial determination regarding voidness and voidability, available

for review by the Board. Such a determination, which COMAR

21.01.02.01(34) requires be in writing, would presumably set forth the

facts relating to the procurement in sufficient detail to allow an informed

judgment by the Board.

A purported contract that does not comply with the

Procurement Law or its implementing regulations is void. §11-

204(b)(1) of the State Finance and Procurement Article (“SF”

Article); COMAR 21.03.01.02A. Procedures normally used for

contract approval may not be used when the lack of compliance is

known to the approval authority. Instead, under SF §11-204(c)(1)

and COMAR 21.03.01.03A, the Board may, in its discretion, treat a

contract as merely voidable if (i) the parties acted in good faith, (ii)

ratification would not undermine the purposes of the Procurement

Law, and (iii) the violation was insignificant or did not prevent

substantial compliance with the Procurement Law. While judgments

about what is void or voidable are for the Board and not the Attorney

General, certain facts of which we have been made aware ) for

example, the desirability of using the federal grant funds promptly

for these public health research projects and the unique expertise of

Hopkins ) coupled with the apparent good faith of DHMH and

Hopkins, suggest that a determination of mere voidability would be

well within the Board’s discretion. 

3

III

Conclusion

In summary, it is our opinion that the Board may, in its

discretion, approve the contracts with Hopkins as of the dates when

Hopkins’ performance commenced. 

J. Joseph Curran, Jr.

Attorney General

Jack Schwartz

Chief Counsel

Opinions & Advice